Past iadvisory Questions and Answers: Vietnam

In this issue, iadvisors tackle questions on the approximate set up cost when setting up a representative office, as well as trade licensing and labour law issues in Vietnam.

What is the approximate initial set up cost (legal fees and office leasing) to open a Representative Office (RO) in Vietnam?,

Legal fees including legal cost to set up a RO in Vietnam is about US$6,000 (S$83501).

Leasers of vacant premises usually ask for 3 months rent deposit of about US$15(S$211)/square meter/month. A foreign invested business center is charging US$900(S$12521) per month for 9 sq meter furnished office.

I currently have an office in Vietnam registered as a foreign investment company. I like to include trading and distribution right to my current business license. How should I proceed?

In Vietnam the trading rights includes the right to import and to export but excludes the right to distribute which means that you should most probably assign the distribution to an appointed distributor. Any foreign firm or individual (including foreign-invested firms) registered to engage in import activities would be free to select a distributor or distributors of their choice provided that such distributor or distributors had the right to distribute the respective product(s) in the customs territory of Vietnam.

Application for the trading licenses should be done with the Ministry of Industry and Trade of Vietnam.

Do all the articles in the Vietnam Labour code apply to a 100% foreign-owned Limited Liability Company (LLC)? If only certain articles apply, what are the articles?

The Vietnam Labour Code provides that "A Vietnamese citizen who works in an enterprise with foreign owned capital in Vietnam, or in a foreign or international organization operating in the territory of Vietnam, and a foreigner who works in an enterprise or organization, or for an individual, operating in the territory of Vietnam, shall be subject to the provisions of this Code and other provisions of the law of Vietnam, except where the provisions of an international treaty to which the Socialist Republic of Vietnam is a signatory or participant provide otherwise."

So yes, all articles would generally apply.

1. US$1=S$1.39

All answers are provided to the best knowledge of the iadvisors at the point of question, and are solely represented by the iadvisors, not IE Singapore.

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